Correlation Between Kumpulan Kitacon and Heineken Bhd
Can any of the company-specific risk be diversified away by investing in both Kumpulan Kitacon and Heineken Bhd at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Kumpulan Kitacon and Heineken Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kumpulan Kitacon Berhad and Heineken Bhd, you can compare the effects of market volatilities on Kumpulan Kitacon and Heineken Bhd and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Kumpulan Kitacon with a short position of Heineken Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kumpulan Kitacon and Heineken Bhd.
Diversification Opportunities for Kumpulan Kitacon and Heineken Bhd
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kumpulan and Heineken is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Kumpulan Kitacon Berhad and Heineken Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken Bhd and Kumpulan Kitacon is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Kumpulan Kitacon Berhad are associated (or correlated) with Heineken Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heineken Bhd has no effect on the direction of Kumpulan Kitacon i.e., Kumpulan Kitacon and Heineken Bhd go up and down completely randomly.
Pair Corralation between Kumpulan Kitacon and Heineken Bhd
Assuming the 90 days trading horizon Kumpulan Kitacon Berhad is expected to under-perform the Heineken Bhd. In addition to that, Kumpulan Kitacon is 3.04 times more volatile than Heineken Bhd. It trades about -0.11 of its total potential returns per unit of risk. Heineken Bhd is currently generating about -0.13 per unit of volatility. If you would invest 2,476 in Heineken Bhd on November 2, 2024 and sell it today you would lose (26.00) from holding Heineken Bhd or give up 1.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kumpulan Kitacon Berhad vs. Heineken Bhd
Performance |
| Timeline |
| Kumpulan Kitacon Berhad |
| Heineken Bhd |
Kumpulan Kitacon and Heineken Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kumpulan Kitacon and Heineken Bhd
The main advantage of trading using opposite Kumpulan Kitacon and Heineken Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kumpulan Kitacon position performs unexpectedly, Heineken Bhd can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Heineken Bhd will offset losses from the drop in Heineken Bhd's long position.| Kumpulan Kitacon vs. Malayan Banking Bhd | Kumpulan Kitacon vs. Public Bank Bhd | Kumpulan Kitacon vs. Petronas Chemicals Group | Kumpulan Kitacon vs. Tenaga Nasional Bhd |
| Heineken Bhd vs. Carlsberg Brewery Malaysia | Heineken Bhd vs. Nexgram Holdings Bhd | Heineken Bhd vs. Techfast Holdings Bhd |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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